Galena Park Independent School District Annual Financial ...

Galena Park Independent School District Annual Financial Management Report Fiscal Year 2011-2012

Distributed at Public Hearing November 11, 2013

TABLE OF CONTENTS

Transmittal Letter

3

Official Notification of the 2013 Final School FIRST Rating

4

2011-2012 District Status

6

How Ratings Are Assessed

8

Disclosures

Superintendent's Contract

13

Superintendent and Board of Trustees Disclosure Requirements

24

Summary Schedule of Data Submitted Under the Financial

25

Solvency Provisions of TEC ?39.0822

2

Sonya George, CPA Chief Financial Officer

Galena Park ISD 14705 Woodforest Blvd.

Houston, TX 77015 (832) 386-1205

sgeorge@

November 11, 2013

Dr. Angi Williams, Superintendent Board of Trustees Citizens of Galena Park Independent School District

In accordance with Texas Administrative Code Chapter 19, Subchapter AA 109.001, the 2011-2012 Annual Financial Management Report is being presented. Galena Park Independent School District received a rating of "Superior Achievement" under Texas' Schools FIRST financial accountability rating system. The Superior Achievement rating is the state's highest, demonstrating the quality of Galena Park ISD's financial management and reporting system. This rating shows that Galena Park ISD is accountable not only for student learning, but also for achieving these results cost-effectively and efficiently.

This is the tenth year of Schools FIRST (Financial Accountability Rating System of Texas), a financial accountability system for Texas school districts developed by the Texas Education Agency in response to Senate Bill 875 of the 76th Texas Legislature in 1999. The primary goal of Schools FIRST is to achieve quality performance in the management of school districts' financial resources, a goal made more significant due to the complexity of accounting associated with Texas' school finance system.

Included in this report are the additional disclosure requirements, which include a copy of the Superintendent's contract, details of reimbursements received by the Superintendent and members of the Board of Trustees, additional statements relating to any outside compensation of the Superintendent, gifts to District officials or Board members, business transactions between the District and members of the Board of Trustees and a summary schedule of the data submitted to TEA under financial solvency provisions of TEC ?39.08252.

Sincerely,

Sonya George, CPA

3

September 13, 2013

Action Required

To The Administrator Addressed:

Subject: 2013 Final FIRST Ratings

The purpose of this letter is to inform you that the final Financial Integrity Rating System of Texas (FIRST) ratings for 2013 are now publicly available. The ratings for both school districts and open-enrollment charter schools can be viewed on the Texas Education Agency (TEA) website.

A previous "To The Administrator Addressed" letter, dated June 24, 2013, instructed local educational agencies (LEAs), school districts and open-enrollment charter schools, to view their preliminary FIRST ratings, and provided details regarding the analysis of financial, staff and student data used by TEA to create the ratings. The letter also described the appeals process available to LEAs. This appeals process is now complete and all FIRST ratings are final.

Required Reporting

In order to comply with the requirements given in Title 19 of the Texas Administrative Code (TAC), ?109.1005, all LEAs are required to report information and financial accountability ratings to parents and taxpayers by implementing specific reporting procedures, including the following:

1. Within two months after receipt of its final FIRST rating, each LEA must announce and hold a public meeting to distribute a financial management report that explains the LEA's rating and its performance under each of the indicators used in TEA's analysis for the current year and each of the indicators used in TEA's analysis for the prior year.

2. The LEA must inform taxpayers of this public meeting by publishing two newspaper notices, the first of which may not be published more than 30 days prior to or less than 14 days prior to the public meeting.

This public meeting may be combined with a scheduled regular meeting of the LEA's governing board.

The financial management report must include specific information described in 19 TAC ?109.1005. To help LEAs prepare the report, TEA has created a template for the report that LEAs can follow. A template for school districts and a template for charter schools are both available online. In addition to the required information, LEAs are encouraged to provide additional information in the report that will be beneficial to taxpayers, especially information that can explain any special circumstances that may have affected the LEA's FIRST rating.

At the public meeting, the LEA should review the information that must be included in the financial management report.

4

LEAs should review all of the requirements given in 19 TAC ?109.1005 for additional information. Please note that as part of the financial management report, each LEA must provide a summary of the data that was previously submitted to TEA for purposes related to financial solvency. This data is required under the financial solvency provisions of Texas Education Code ?39.0822. Accreditation Status In accordance with the accreditation status rules given in 19 TAC ?97.1055, TEA will take into consideration an LEA's FIRST rating when assigning an accreditation status. Contact for Further Information If you have questions about your LEA's FIRST rating, please contact me by telephone at (512) 475-3451 or by email at Belinda.Dyer@tea.state.tx.us. Sincerely, Belinda Dyer Director of Financial Accountability Office of School Finance

5

Financial Integrity Rating System of Texas

2011-2012 District Status Detail

Name: GALENA PARK ISD(101910)

Publication Level 1: 06/21/2013 3:05:18 PM

Status: Passed

Publication Level 2: 09/12/2013 6:29:59 PM

Rating: Superior Achievement

Last Updated: 09/12/2013 6:29:59 PM

District Score: 70

Passing Score: 52

#

Indicator Description

FY 2011-2012 FY 2010-2011

Score

Score

1 Was The Total Fund Balance Less Nonspendable and Restricted Fund

Yes

Yes

Balance Greater Than Zero In The General Fund?

2 Was the Total Unrestricted Net Asset Balance (Net of Accretion of Interest on

Yes

Yes

Capital Appreciation Bonds) In the Governmental Activities Column in the

Statement of Net Assets Greater than Zero? (If the District's 5 Year % Change

in Students was 10% more)

3 Were There No Disclosures In The Annual Financial Report And/Or Other

Yes

Yes

Sources Of Information Concerning Default On Bonded Indebtedness

Obligations?

4 Was The Annual Financial Report Filed Within One Month After November

Yes

Yes

27th or January 28th Deadline Depending Upon The District's Fiscal Year End

Date (June 30th or August 31st)?

5 Was There An Unqualified Opinion in Annual Financial Report?

Yes

Yes

6 Did The Annual Financial Report Not Disclose Any Instance(s) Of Material

Yes

Yes

Weaknesses In Internal Controls?

1 Multiplier Sum 1 Multiplier Sum

7 Was The Three-Year Average Percent Of Total Tax Collections (Including

5

5

Delinquent) Greater Than 98%?

8 Did The Comparison Of PEIMS Data To Like Information In Annual Financial

5

5

Report Result In An Aggregate Variance Of Less Than 3 Percent Of

Expenditures Per Fund Type (Data Quality Measure)?

9 Were Debt Related Expenditures (Net Of IFA And/Or EDA Allotment) <

5

5

$350.00 Per Student? (If The District's Five-Year Percent Change In Students

= Or > 7%, Or If Property Taxes Collected Per Penny Of Tax Effort > $200,000

Per Student)

10 Was There No Disclosure In The Annual Audit Report Of Material

5

5

Noncompliance?

11 Did The District Have Full Accreditation Status In Relation To Financial

5

5

Management Practices? (e.g. No Conservator Or Monitor Assigned)

12 Was The Aggregate Of Budgeted Expenditures And Other Uses Less Than

5

5

The Aggregate Of Total Revenues, Other Resources and Fund Balance In

General Fund?

13 If The District's Aggregate Fund Balance In The General Fund And Capital

5

5

Projects Fund Was Less Than Zero, Were Construction Projects Adequately

Financed? (To Avoid Creating Or Adding To The Fund Balance Deficit

Situation)

14 Was The Ratio Of Cash And Investments To Deferred Revenues (Excluding

5

5

Amount Equal To Net Delinquent Taxes Receivable) In The General Fund

Greater Than Or Equal To 1:1? (If Deferred Revenues Are Less Than Net

Delinquent Taxes Receivable)

15 Was The Administrative Cost Ratio Less Than The Threshold Ratio?

5

5

16 Was The Ratio Of Students To Teachers Within the Ranges Shown Below

5

5

6

According To District Size?

17 Was The Ratio Of Students To Total Staff Within the Ranges Shown Below

According To District Size?

18 Was The Decrease In Undesignated Unreserved Fund Balance < 20% Over

Two Fiscal Years?(If Total Revenues > Operating Expenditures In The General Fund, Then District Receives 5 Points)

19 Was The Aggregate Total Of Cash And Investments In The General Fund

More Than $0?

20 Were Investment Earnings In All Funds (Excluding Debt Service Fund and

Capital Projects Fund) Meet or Exceed the 3-Month Treasury Bill Rate? (Prior Year: More Than $20 Per Student?)

5

4

5

5

5

5

5

5

70 Weighted Sum

1 Multiplier Sum

70 Score

69 Weighted Sum

1 Multiplier Sum

69 Score

DETERMINATION OF RATING

A. Did The District Answer 'No' To Indicators 1, 2, 3 Or 4? OR Did The District Answer 'No' To Both 5 and 6? If So, The District's Rating Is Substandard Achievement.

B. Determine Rating By Applicable Range For summation of the indicator scores (Indicators 7-20)

Superior Achievement Above Standard Achievement Standard Achievement Substandard Achievement

64-70 58-63 52-57 10000

13.5

22

Indicator 18 District Size - Number of Students < 500 500-999 1000-4999 5000-9999 => 10000

Ranges for Ratios

Low

High

5

14

5.8

14

6.3

14

6.8

14

7.0

14

7

HOW 2011-2012 RATINGS ARE ASSESSED

1. Was total Fund Balance less Nonspendable and Restricted Fund Balance greater than Zero in the General Fund?

School districts must legally have a fund balance to ensure adequate funding for operations. This indicator is designed to ensure that your district has a positive amount of fund balance cash (savings) that is not designated or "restricted" for a specific purpose. In other words, "Does your district have funds set aside for a rainy day?"

2. Was the Total Unrestricted Net Asset Balance (Net of Accretion of Interest for Capital Appreciation Bonds) in the Governmental Activities Column in the Statement of Net Assets Greater than Zero? (If the District's Five-Year Percent Change in Students was a 10% Increase or More then Answer Yes)

This indicator simply asks, "Did the district's total assets exceed the total amount of liabilities (according to the very first financial statement in the annual audit report)?" Fortunately this indicator recognizes that high-growth districts incur large amounts of debt to fund construction, and that total debt may exceed the total amount of assets under certain scenarios.

3. Were there NO disclosures in the Annual Financial Report and/or other sources of information concerning default on bonded indebtedness obligations?

This indicator seeks to make certain that your district has paid your bills/obligations on bonds issued to pay for school construction, etc.

4. Was the Annual Financial Report filed within one month after the November 27 or January 28 deadline depending upon the district's Fiscal Year end date (June 30 or August 31)?

A simple indicator. Was your Annual Financial Report filed by the deadline?

5. Was there an Unqualified Opinion in the Annual Financial Report?

A "qualification" on your financial report means that you need to correct some of your reporting or financial controls. A district's goal, therefore, is to receive an "unqualified opinion" on its Annual Financial Report. This is a simple "Yes" or "No" indicator.

8

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